Site Mobile Navigation

European Carmakers Split on How to Survive Slump

The Renault Captur is a compact S.U.V. that the automaker says has plenty of interior space.Credit
Kai Pfaffenbach/Reuters

FRANKFURT — The Fiat stand at the motor show here on Tuesday was particularly quiet, which could be seen as a sign of weakness, or perhaps part of a clever strategy.

In the face of the slowest European car sales in two decades, competitors like Opel, Renault, Ford and Peugeot were introducing new models or at least flaunting design studies at the show. But Fiat had no big news. And that was by design, the company’s executives said.

“To launch a new model now, you lose a good opportunity, because when the market recovers, the model will be old,” Luca di Montezemolo, the chairman of the Ferrari unit of Fiat, said in an interview Tuesday.

Other carmakers are taking the opposite tack. “There is no other way to compete in a tight market except with new products,” said Karl-Thomas Neumann, president of General Motors Europe and chief executive of the company’s Opel unit.

The fates of companies and thousands of jobs will depend on which strategy turns out to be right. If the market has hit bottom and begins to grow again, as some in the industry predicted on Tuesday, Opel’s decision to offer a face-lift of its flagship Insignia, a sibling of the Buick Regal, will look smart. But if sales fail to improve, the Insignia and other new models may sell only at big discounts, adding further to the billions of euros in losses that Opel has accumulated in Europe. The same risk faces other carmakers that have suffered most since European sales began to plummet in 2008, including Ford, Renault and PSA Peugeot Citroën.

Because Fiat owns Chrysler, and its chief executive, Sergio Marchionne, is chief executive of both companies, the Italian carmaker’s fate has implications for its American sibling. Mr. Marchionne, normally a dominant presence at car shows because of his bluntness and sarcastic wit, raised eyebrows when he canceled a news conference planned for Tuesday. A spokesman for Fiat said that Mr. Marchionne was too busy and that his low profile did not signal “anything sinister.”

Because of the enormous complexity of designing and making a car, including marshaling a large supplier network, decisions on when to introduce and produce new cars are made at least two years in advance. Auto executives who are unveiling cars now — or, like Fiat executives, are not — are reckoning with decisions made long ago.

Still, in the here and now there is a strong correlation between how the auto companies are assessing the near-term market and the availability of new models. Mr. di Montezemolo of Ferrari voiced pessimism about the mass market. “Europe is still very difficult,” he said. “I don’t see any kind of recovery.”

Stephen Odell, chief executive of Ford of Europe, however, said on Tuesday that he expected the European market to grow 20 percent in the next five years. “There are plenty of indicators we are running around what looks like the bottom,” he said.

If so, Ford is ready to throw cars at the rebound. The company said Tuesday that it would introduce 25 new models by the end of 2017. That was a substantial increase from a year ago, when the company said it would introduce 15 new models through 2017. On Tuesday, the company unveiled a high-end version of its flagship Mondeo, called the Vignale, as well as a design study for a new version of its S-Max minivan.

Carlos Ghosn, chief executive of the Renault-Nissan Alliance, was also fairly optimistic. “I think we are about to see the end of the five-year decline,” he said at a news conference.

Mr. Ghosn noted that sales of used cars had improved, which he said was a sign that new-car sales would follow. “We have seen the volume of used cars go up and we’ve seen prices firm up,” Mr. Ghosn said. “We are pretty confident that the slope is ending.” But it is unlikely to be a strong recovery, he added.

Earlier this year, Renault introduced Captur, a compact sport utility vehicle. Small four-wheel-drive cars like the Opel Mokka are among the few bright spots in the European market. In Germany, such cars accounted for 16 percent of all new cars sold in the first seven months of this year, compared with 7 percent in 2009.

On Tuesday in Frankfurt, Renault unveiled the Initiale, a concept car that may be part of a drive by the French carmaker to recapture a share of the luxury market.

Peugeot, the European carmaker that may be suffering the most, showed a redesigned version of its 308 compact on Tuesday. It competes with the Volkswagen Golf in the segment of the European market that has the highest volume. It is a crucial car for Peugeot, but its debut now is a gamble. The smaller Peugeot 208, introduced last year, has not lived up to expectations, analysts said.

In 2008, when the European market began to sag, Fiat slowed its new model introductions. Its current lineup is built around variations of two basic models, the stylish 500 subcompact and the Panda, a compact wagon.

Richard Gadeselli, a Fiat spokesman, said that while Fiat did not introduce any new models in Frankfurt, it continued to invest in other brands that belonged to the company, like Maserati. Fiat is trying to convert Maserati from an expensive niche brand to one that competes more with the likes of BMW.

Fiat also plans to introduce an S.U.V. version of the 500 next year, while its Alfa-Romeo unit intends to re-enter the United States market next year, Mr. Gadeselli said. In Frankfurt, Alfa displayed its 4C sports car, which will be produced in limited numbers and used to re-establish the brand in the United States.

At the show, competitors said they found Fiat’s wait-and-see strategy hard to fathom.

“Our Italian competitor,” Jérôme Stoll, head of sales at Renault, said, shaking his head, “I don’t know who they are now.”

A version of this article appears in print on September 11, 2013, on page B3 of the New York edition with the headline: European Carmakers Split On How to Survive Slump. Order Reprints|Today's Paper|Subscribe